Equity for all?. My experience as Carta’s lone woman…

By Emily Kramer

Emily Kramer

Today, I filed a lawsuit against Carta. My suit alleges claims for gender discrimination, retaliation, wrongful termination in violation of public policy, violation of the California Equal Pay Act, and failure to take all reasonable steps to prevent discrimination, retaliation, and harassment. I am represented by Sharon Vinick of Levy Vinick Burrell Hyams LLP — an attorney who has devoted her career to championing the rights of women and was the first attorney to file a suit challenging the NFL’s disgraceful failure to pay cheerleaders fair pay for their work.

It’s become increasingly clear that “mission-driven” Silicon Valley companies are often built on hypocritical lies, but as my lawsuit alleges, Carta takes this to an entirely new level. Over the last few months, I’ve questioned if I should share my story. If others have it worse, should I share what happened to me?

Yes. No one else should have this experience. Ever.

I’m speaking out against what occurred at Carta because it is unlawful, unfair, damaging, and deeply hurtful. And if it felt this challenging to do my job as a privileged white woman, I can’t imagine what it is like for others. I’m certain it must be worse. Sadly, my story isn’t rare, and I am truly lucky to feel safe enough to share my story and file a lawsuit. I think it’s important to shine a light on these experiences to drive positive change in diversity, equity, and inclusion within tech.

Carta is a startup that makes equity management software. It is now valued at more than $3 billion, having raised more than $600 million from top investors including Andreessen Horowitz, Lightspeed Ventures, and Goldman Sachs. But Carta doesn’t simply market itself as a software company. Carta has a stated “commitment to transparency and equality in equity” and is on a general mission to “create more owners.” In fact, Carta implies it is the harbinger of an entire global revolution.

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carta.com/about on 7/20/20

The perfect role

I was recruited to Carta in 2018 to lead marketing on the executive team.

Having led marketing departments at SaaS startups Asana, Astro, and Ticketfly, I was familiar with equity compensation and its benefits — Asana is considered one of this year’s most promising companies planning to go public; Astro was acquired by Slack; and Ticketfly by Pandora and Eventbrite. As part of these early teams, I had to navigate and understand the complexities of equity and have seen firsthand the rewards of startup ownership. So, I was not only compelled by Carta’s product and promising growth potential, but I also believed in their goals of making equity and ownership more transparent and was excited to be a spokesperson for Carta. The opportunity seemed like the perfect blend of my experience and passion.

I accepted the position in early 2018. But within less than two years, as my lawsuit alleges, I would realize that not only was Carta just another “boys-club” startup, but it didn’t even manifest its own ideals inside its own walls.

Exposing the equity gap with Carta

My tenure at Carta would be considered a success by most measures: I built a category-defining brand, helped quadruple Carta’s revenue, and established a 25+ person marketing team from scratch in less than two years. I was proud to attract four teammates from past roles at three companies and four internal transfers from within Carta, while making sure to build a culture of diversity and inclusivity within marketing. As my lawsuit alleges, while turnover at Carta was high, attrition on my team was one of the lowest at the company.

But most meaningfully, I led Carta’s efforts to expose the “equity gap” in tech. As part of my brand-marketing strategy, I developed two flagship annual industry reports (September 2018 and November 2019). And fair equity practices have now become the company’s now well-known purpose.

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Source: twitter.com/carta

We partnered with women-led investment collective #ANGELS for our first gender equity gap report, called the Gap Table. Our report exposed the gender inequalities in equity compensation at venture-backed companies. As part of the strategy, I advised Henry to communicate transparently about the state of Carta’s own equity gap and other gender-related disparities in the company and industry. So, following the distribution of the 2018 report, Carta’s CEO Henry Ward, wrote:

Women own 9% of employee and founder equity in Silicon Valley. Men own the other 91%. Women make up 35% of equity holding employees but own just 20% of the equity. And it starts at the beginning — female founders are 13% of all founders but they hold 6% of founder equity. Unfortunately, Carta is not an exception. Only 30% of our 400 employees are women. One member of our executive team is a woman. And zero of our seven board members are women…I am embarrassed that we are part of the problem.

I was ‘that’ woman on the executive team and I supported — and at the time even believed — Henry’s desire to “be part of the solution.” In that post, Henry also announced that he would add a woman to Carta’s Board of Directors by the end of 2018:

California is on the verge of mandating that public companies have at least one female independent. We will add our first female independent director by the end of the year. I think other startups should follow suit. For any all-male board, with five or more directors, one board member should step down to make room for a female independent.

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Excerpt from Henry’s Medium Post, as of 7/2/20

I was proud of the report’s positive impact and the significant press and industry attention it gave Carta. I couldn’t wait to build on the momentum the following year and begin making the equity-gap issue just as mainstream as other issues afflicting tech: wage gaps, abysmal diversity, and discrimination, to name a few.

Carta’s business was thriving and our brand was gaining more recognition. We raised another $80M in funding shortly thereafter.

Experiencing the equity gap at Carta

On a macro level, Carta did not honor this commitment to be part of the change, despite many opportunities to do so. As my lawsuit details, during my tenure, nearly 20 people cycled through the executive team, yet no additional women, nor any people of color were added to the team. Despite raising a $300M Series E led by Andreessen Horowitz in May 2019, we still did not add a woman to the board (but we did add Marc Andreessen). To my knowledge, they still have not added a woman to the board.

But it was my personal experience that really showed Carta’s true colors.

In late summer of 2018, Carta conducted an internal audit of its salary and equity compensation timed to the publication of the Gap Table report. Carta posted a blog about the process and explained that Carta’s internal analysis made it clear that equity was not distributed appropriately and that women had received less equity than men. The post states, “40% of the women at Carta received an equity fix, compared to 32% of the men; overall, this affected about 35% of the company.”

As for my compensation, the audit not only found that I was underpaid by $50,000 annually, but that my original equity grant was one-third of the equity paid to comparable employees (all of whom were men). Given this massive discrepancy, I expected these shares to be retroactive to reflect my start date. However, the vesting of these shares was not backdated or accelerated to account for the previous six months of my tenure. My request for backdating or accelerating these options was denied. As my lawsuit alleges, I was disappointed to learn that Carta only cares about fairness in equity when it suits them.

Speaking out

I didn’t stay quiet on the issues of diversity and inclusion and how they were affecting the company. I thought, as an executive, I could cause internal change. I thought Carta’s internal practices would catch up to the reputation we were building externally. This approach backfired. The more I spoke out, the worse I was treated by my executive peers, as my suit alleges.

For example, in our Series E pitch deck, one slide tried to equate mere wage-earning with “slavery” and included illustrations of people actually working the fields. I explained repeatedly that this was inappropriate, triggering, and offensive. Despite my concerns, the pitch deck was never changed for our fundraising efforts or internal presentation to the company. I was reprimanded by Sumeet Gajri, our Chief Strategy Officer, and Henry himself for attempting to remove this slide for a large tech conference. Between experiences like these and the overall lackluster commitment to improving our own executive team and board’s diversity, I finally teared up talking about how embarrassed I was by the lack of diversity at an executive offsite.

Being passed over
I was still hopeful that things could turn around, but increasingly I felt upset and confused by the state of affairs at Carta. As I allege in my lawsuit, I asked Henry what I needed to do to get promoted to CMO (or even SVP), as I had been leading the marketing team for more than a year, was already on the executive team, and was effectively doing the job of a senior executive. I had already seen two men with significantly less relevant work experience be promoted to C-Level positions.

In response to my request for a promotion, Henry told me, “You aren’t even close” to getting promoted. He also commented on my “style” and told me that while I was “among the five smartest people at the company and had built a strong team, I didn’t get along with the other members of the executive team like they got along with each other.” This comment felt particularly questionable as I was the only woman on the executive team and also the only openly queer person.

As I allege in my lawsuit, it seemed that other members of the executive team, all of whom were male, were given promotions and titles in accordance with their measurable achievements, not on the basis of Henry’s subjective perceptions of their personalities.

At this point, I felt like a complete outsider. Still, I continued to work proactively to address my misgivings. As I allege in my lawsuit, I directly voiced concerns with Henry and HR about the disparities in compensation, the sexist culture, and the lack of diversity and inclusion efforts within the company. These complaints resulted in additional retaliation.

Fair equity should be Table Stakes

At the same time, I kept focusing on building my team and on educating the industry about fair equity practices. As a follow up to our 2018 gender equity gap report, I wanted us to not only release another data study, but also start a movement with a simple but powerful message: fair equity is table stakes. My vision was to create an entirely separate initiative — Table Stakes — including an event that would jumpstart a new community of voices, experts, and tech employees to rally around this issue.

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Source: Twitter @nickykamra

My team and I worked around the clock heading into November to launch the 2019 report and the Table Stakes event. By any measure possible, Table Stakes was a resounding success. From incredible press coverage in dozens of top-tier business publications to a 400+ person event in San Francisco packed with some of the most important voices on the issue, the event gave me hope that despite my experience at Carta, we were having a positive impact.

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But, on the inside, Carta still wasn’t practicing what they preached.

As my lawsuit states, I was paid less than similarly-situated males, given less equity than similarly-situated males, repeatedly refused a promotion while less qualified men were promoted, subjected to sexist and subjective criticism about my “style” (despite my strong performance), and subjected to increasingly hostile responses to my complaints of sex discrimination.

“You’re an asshole”

The sex discrimination and retaliatory abuse culminated in Henry haranguing me during a one-on-one meeting, where he repeatedly called me an “asshole,” as my lawsuit details. During the course of this meeting, Henry and I discussed the success of the Table Stakes event. Then, inexplicably and not related to existing discussion topics, Henry’s tone and comments abruptly changed. As my suit alleges, Henry said, “We have a problem. You are in violation of Carta’s no-asshole policy.” As I allege in my lawsuit, here are some of the other things he said during the meeting:

  • “You are not a kind person”
  • “You are like an alcoholic who needs to admit her problem and have a full-scale recovery from being an asshole”
  • “I’m concerned that for such a talented person, you have no idea how not to be an asshole”
  • “You’ve received passes in the past because you’re a woman”
  • “No one wants to work with you, not even women”
  • “Come back next week and admit that you are ready for recovery or leave the company”

I was stunned. I found Henry’s sexist, hostile, and cruel verbal attack shocking and humiliating, particularly because of the recent success of Table Stakes, less than two weeks prior, and since I had never received written negative feedback from Henry.

During Henry’s outburst, as my lawsuit alleges, I stayed calm, but I tried to defend myself — against what I’m not sure — as no examples of poor performance were given. I responded that I had never seen a “no-asshole policy” (because it didn’t exist). I talked to him about the struggles I’d faced at Carta. I even tried to convince him that I wasn’t an asshole by explaining how many people worked for me a second time or transferred to my team at Carta.

I left the Friday meeting defeated and deeply uncomfortable.

Forced to resign
I thought my performance would speak for itself and I could use my voice to drive change internally at Carta. After nearly two years, I sadly realized how naive and ineffective this approach was.

Henry’s unprofessional behavior in our final meeting was his last act of retaliation, and the last straw. As my lawsuit alleges, Henry’s behavior over the course of my employment, his refusal to promote me, his hostility towards me when I complained of gender discrimination, and his sexist comments about my style and alleged likeability problems left me with no choice but to end my employment.

I sent a lengthy email to Henry two days later (see image below). He responded in eight minutes. As my lawsuit alleges, he didn’t dispute that I had been forced to resign and didn’t dispute my description of his comments in the meeting. I don’t think he was stunned. He wanted me out.

As my lawsuit alleges, I believe Henry’s behavior was calculated to force me to resign: directly terminating me would have been a disaster for Carta, given the company’s core message and the lack of women and diversity on the executive team and board.

Note: These emails have been shortened for clarity, are included in my lawsuit, and are not screenshots.

Looking forward

Like many, I am deeply saddened by the state of the world, and the state of an industry that is supposedly at the forefront of innovation. To me, being at the forefront of innovation doesn’t involve discrimination or bias.

I’ve found the best way to cope and move forward is to channel my energy into a number of projects, all with the goal to help underrepresented people in tech get a seat at the table, have a voice at that table, and of course, receive equal compensation for equal work.

The fact remains: fair equity should be table stakes.